JAZZ and 757

[skyline]

I heard that JAZZ will be operating (6) 757 by Nov 2010 for Thomas Cook. Also understand just the beginning of many other things to come. Can anyone confirm?

[conehead]

I’m very pleased to share the very exciting news of our new partnership with Thomas Cook Canada Inc., subject to certain regulatory approvals. The initial plan is to fly no less than six B757-200’s from Canadian gateways to various sun destinations for the winter season (November through April) beginning this November.

If on or before May 30, 2010 Jazz and Thomas Cook are able to agree on pricing for the third, fourth and fifth winter seasons, then the agreement will be for a term ending April 30, 2015. Otherwise this agreement will have an initial term ending April 30, 2012.

This agreement is expected to generate approximately $100 million in additional annual revenues with conservative margins. The terms and conditions of the transaction are confidential.

This is a strong initiative that begins the diversification of Jazz Air LP beyond our current business in a meaningful way. Growth remains a major corporate objective; our agreement with Thomas Cook is a strong start that delivers value to all stakeholders. Together we’re bringing Jazz to new heights and entering the international market.

Our exceptional ability to operate safely, reliably with excellent customer service at competitive rates is the reason why Jazz Air LP is able to grow and diversify. It’s because of your ‘can do’ attitude and professionalism. We continue to deliver on our promises and will look further for value-driven opportunities.

The contract is subject to certain regulatory approvals, and we’re begun to work through a number of details. I know you have many questions; the Q&A below provides the answers that we have to this point – others will be provided as they are finalized. For now, I can tell you that the aircraft will be leased to us for each winter season by Thomas Cook Airlines Ltd. and will feature the Thomas Cook livery beginning in January 2011. The service will be completely branded ‘Thomas Cook’ and we’ll operate on their behalf utilizing the Jazz QK flight designator.

We’ll be hiring additional flight attendants (each aircraft requires 6 flight attendants), maintenance, SOCC, management and administrative personnel and likely pilots as the final schedule details become clear. The exact numbers and their breakdown will be determined in due course. This new contract is compatible with the provisions within our Capacity Purchase Agreement with Air Canada, and we’ll continue to provide our valued customer with industry-leading operational performance. This new partnership is consistent with our current business model as we’re operating on behalf of one of the world’s largest leisure travel groups.

Every employee has played a role in bringing us to this exciting stage, but the outstanding efforts of Scott Tapson, Vice President of Business Development, must be commended. I sincerely thank Scott and his team for delivering this great opportunity to us.

Now is our time to shine in new markets. Your efforts have brought us here, and I know they will help us to exceed the expectations of our new customer as we build this wonderful and new partnership.

Sincerely,

Joe Randell

President and Chief Executive Officer

Jazz Air LP

[ModerateChop]

Jazz Air LP announces flight services agreement with Thomas Cook Canada to operate Boeing 757-200 aircraft

HALIFAX, April 5 /CNW/ - Today, Jazz Air LP announced that it has signed a flight services agreement with Thomas Cook Canada Inc. ("Thomas Cook") to operate no less than six Boeing 757-200 aircraft on their behalf to various sun destinations from Canadian gateways during the winter season (November through April). Subject to Jazz obtaining the required regulatory approvals and the execution of definitive leasing and maintenance agreements with Thomas Cook Airlines Ltd., the service will commence in November 2010.

If on or before May 30, 2010 Jazz and Thomas Cook are able to agree on pricing for the third, fourth and fifth winter seasons, then the agreement will be for a term ending April 30, 2015. Otherwise the agreement will have an initial term ending April 30, 2012.

This agreement is expected to generate approximately $100 million in additional annual revenues. The terms and conditions of the transaction are confidential.

"Growing and diversifying our business remains a top corporate priority; our agreement with Thomas Cook is a strong start that delivers value to all of our stakeholders," said Joseph Randell, President and Chief Executive Officer, Jazz Air LP. "We are thrilled to be partnering with one of the world's largest leisure travel groups, and it's our employees who have brought us to this important milestone. Our demonstrated ability to operate safely, reliably and with excellent customer service at competitive rates is the reason why we are able to grow and diversify our business. All our employees are to be commended for their 'can do' attitude and professionalism."

The opportunity to enter into this strategic partnership provides the potential for additional benefits for all stakeholders with minimum risk. The aircraft will be leased to Jazz Air LP from Thomas Cook Airlines Ltd. The plan is to brand the service as 'Thomas Cook' beginning in January, 2011.

"We see a great fit between Thomas Cook and Jazz," said Michael Friisdahl, President and Chief Executive Officer, Thomas Cook North America. "We're pleased to partner with an airline that prides itself on exceptional customer service and boasts amongst the strongest on-time performance in North America."

About Jazz Air LP

Jazz Air has a strong history in Canadian aviation with its roots going back to the 1930s. Since becoming publicly traded in February 2006, it has generated some of the strongest operational and financial results in the North American aviation industry. Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. Jazz currently operates scheduled passenger service on behalf of Air Canada with approximately 800 departures per weekday to over 80 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft. For more information, visit www.flyjazz.ca.

About Thomas Cook

Thomas Cook North America is a division of Thomas Cook Group plc, one of the world's leading leisure travel groups with sales of C$13.4 billion, 22.3 million customers and 31,000 employees. Its travel businesses in Canada include Sunquest Vacations, Fun Sun Vacations, Exotik Tours and Bel Air Travel. With a network of over 3,400 owned and franchised travel stores and interests in 86 hotels and resort properties, Thomas Cook operates in 21 countries including Canada and the United States. For more information, visit www.thomascookgroup.ca or www.thomascookgroup.com.

For further information: Media Contacts: Manon Stuart, (902) 873-5054, Halifax, manon.stuart@flyjazz.ca; Debra Williams, (519) 457-8071, London, debra.williams@flyjazz.ca; www.flyjazz.ca

http://www.newswire....0/05/c7704.html

[JZZdxer]

From the Thomas Cook Website

Thomas Cook & Jazz enter partnership

THOMAS COOK NORTH AMERICA AND JAZZ AIR LP

AGREE TO FLIGHT PARTNERSHIP

Introduces Thomas Cook airline brand to serve Sunquest customers

TORONTO, April 5, 2010 – Thomas Cook Canada Inc. and Jazz Air LP (Jazz), have signed a flight services agreement for Jazz to operate flights to the Caribbean, Mexico and Central America on behalf of Thomas Cook’s tour operator Sunquest Vacations. The agreement is conditional on Jazz obtaining the necessary regulatory approvals.

The agreement is effective November 1, 2010, to serve the winter vacation season of 2010/2011 and may extend for up to five years. Jazz will operate a fleet of up to 11 B757 jets from gateways across Canada and will be branded as Thomas Cook Airlines from January 2011.

Jazz is a major Canadian airline, currently flying to more than 80 destinations in North America – more than any other carrier in the country. It has a commercial agreement to operate flights on behalf of Air Canada across Canada and into the United States. Jazz has more than 4,900 employees serving more than 8.8 million passengers, and had revenues of $1.4 billion in 2009.

“We’re extremely proud to be partnering with Jazz to offer our passengers high-quality in-flight services as part of the full Sunquest vacation experience,” said Michael Friisdahl, Chief Executive Officer, Thomas Cook North America, a division of Thomas Cook Group plc, one of the world’s largest leisure travel companies with annual sales of more than $13 billion. “Jazz is recognized and respected across Canada and has the highest on-time performance among Canadian carriers. They share our values emphasizing safety, service, integrity and environmental responsibility. Through the combined operational and financial strength of Thomas Cook and Jazz, we will offer Sunquest customers innovative and dependable vacation packages.”

“Thomas Cook is the world’s leading travel brand and we are very pleased that Jazz will be operating aircraft that will soon carry the Thomas Cook name,” Mr Friisdahl said. “Thomas Cook Airlines operates a total of 93 aircraft worldwide and is well-regarded for its high standards of quality and service.”

“We are delighted that Thomas Cook has selected Jazz as its flying partner. Thomas Cook and Sunquest are known for their exacting customer service standards and we look forward to giving those customers an outstanding and seamless flying experience,” said Joe Randell, President and Chief Executive Officer, Jazz Air LP. “The opportunity to satisfy Thomas Cook and its customers is integral to our growth and diversification strategy.”

Through the Thomas Cook Airline brand, operated by Jazz Air LP, Sunquest will be able to offer superior in-flight service from a wider range of Canadian communities to sun destinations. Further details on our products and services, resulting from the partnership with Jazz, will be announced in the near future

Mr. Friisdahl added: “We are combining the award-winning Sunquest Vacations, with the recognized quality of the Thomas Cook Airline brand and Jazz’s industry-leading airline operations to create a unique consumer experience that will not be matched in the Canadian marketplace.”

[J.O.]

Unless Thomas Cook are changing their position in the marketplace, the majority of this will be seasonal work using the same B757s that were imported into the Skyservice fleet every winter.

My question, is flying on this or similar types even covered in the Jazz collective agreement?

[boestar]

Those details are still being worked out

[J.O.]

One more thing, I suspect that the extension of the contract beyond two years will depend on "cost control". Read into that what you will.

[ModerateChop]

...

[boestar]

Isn’t this partnership conflicting with our capacity purchase agreement (CPA) with Air Canada?

We are comfortable that the CPA does not restrict Jazz from this type of ancillary business.. Jazz will be flying on behalf of a tour operator. This contract does not provide for new capacity in the market – we’re simply a new service provider for Thomas Cook.

[J.O.]

But that tour operator competes directly with Air Canada Vacations, and the minute they offer "air only" to Florida and Las Vegas, they will be competing directly with Air Canada. Could be very interesting...

[AME]

So how legally binding is the CPA between Jazz and Air Canada ? I have a hard time believing Air Canada is just going to sit there and let Jazz start competing directly against them like this. Jazz has lost the plot, see how well Independance Air did after pissing on United. How long will it be before Air Canada corrects Miltons mistake, dumps Jazz, and starts their own in house regional airline ? This would be the perfect opportunity for Air Canada to get rid of all those old Dash-8's and useless 50 seat CRJ's, move the Embraers to Air Canada regional and with new Q400's, screw Jazz, you don't need them anymore.

Don't the same people who own Jazz also own Air Canada? Correct me if I'm wrong, but didn't Jazz transform from a subsiduary to a sister company with the creation of ACE?

[ModerateChop]

..

[ModerateChop]

Don't the same people who own Jazz also own Air Canada? Correct me if I'm wrong, but didn't Jazz transform from a subsiduary to a sister company with the creation of ACE?

On January 24, 2008, ACE Aviation Holdings Inc. ("ACE") sold 13,000,000 Units, thereby reducing its ownership in the Fund to 9.5% of the issued and outstanding Units. As a result, ACE no longer had the ability to appoint the majority of the board of directors of Jazz GP pursuant to the Securityholders' Agreement among the Fund, the Trust, the Partnership, Jazz GP and ACE (the "Securityholders' Agreement"). The Securityholders' Agreement was terminated by agreement among the parties effective as of February 7, 2008. On May 28, 2008, ACE sold its remaining 11,726,920 Units and, to the knowledge of the Fund, presently retains no ownership interest in the Fund. (source Jazz Air LP 2008 MD&A).

[skyline]

Don't be fooled, Air Canada already knew about this and was probably part of it. Air Canada has a lot to worry about in the next little while. The hand that feeds you may be empty.

[rob_andrews]

Hello all,

First time poster long time reader.

My take on this is that I am not too concerned that this move by Jazz to grab new flying from another source of revenue will bring any negative response from Air Canada. First Jazz has shown over the past 4-5 years of it's indepenance to be extremely cautious about taking on any new work. I would be willing to bet that the Jazz management has had their lawyers look over the CPA and ensure that nothing would violate the contract as they can't afford to rock the gravy boat that is the CPA with Air Canada. Secondly, we can't know what perks were thrown into the "new CPA" signed last summer to help Air Canada overcome it's cash crunch. It may be that to help Jazz agree to the deal, Air Canada relaxed some of the non compete clauses which may have impeaded Jazz from getting any outside work. That is for the lawyers and CEO's to know. Thirdly Jazz isn't the company directly competing with Air Canada, the company which is competing is actually Thomas Cook Travel, operating mainly under their Canadian operating name, Sunquest. Jazz is basically taking over the flying which Skyservice (RIP) was doing. Jazz isn't directly pricing, scheduling or even marketing the flights that they'll be flying, in fact they'll be doing for Thomas Cook what they currently do for Air Canada, providing uplift. Therefore I feel that Jazz isn't competing against Air Canada or Air Canada Vacations.

I could be wrong and I really hope I'm not but I don't think there is any violation of the CPA and that Air Canada can't invoke non compete clauses that allow it to cut flying that it currently contracts to Jazz. Only time will tell if this in fact turns out to be a problem. I hope for Air Canada and Jazz's sake that the two companies can still work together as I believe they mutually benefit from each other's presence.

That's my 2 cents though. I'll get off my soap box... lol.

Cheers guys have a great day.

[Jumpy]

Part two of this will be Air Canada Vacations contracting all of their flying to Jazz. This whole excercise has been planned since CCAA. If you don't think that Randall is still working for the ACE BOD then you don't know Jazz....

[dagger]

Part two of this will be Air Canada Vacations contracting all of their flying to Jazz. This whole excercise has been planned since CCAA. If you don't think that Randall is still working for the ACE BOD then you don't know Jazz....

And how would AC circumvent scope rules? I presume AC can buy limited space on another carrier's flights, but chartering entire aircraft? Please explain.

[AME]

Air Canada Vacations is one of Canada's leading tour operators. Based in Montreal and Toronto, Air Canada Vacations operates its business in the outbound leisure travel market (Caribbean, Mexico, U.S., Europe, South America, and Asia) by developing, marketing and distributing vacation travel packages. Air Canada Vacations also offers cruise packages in the Caribbean, North America and Europe. Air Canada Vacations markets its products through its website (www.aircanadavacations.com) and a network of independent travel agencies across Canada .... Other revenues of $882 million in 2009 increased $28 million or 3% from 2008, primarily due to an increase of $46 million in third party revenues at Air Canada Vacations, mainly the result of higher passenger volumes. (source: Air Canada Q4 MD&A).

Sunquest is a direct competitor with Air Canada Vacations. I think Randall is going to learn pretty quickly what happens when you bite the hand that feeds you, not a smart move, more ego than brains, but in his defence I guess he has to do something, anything, to try and increase shareholder value of the income trust.

I guess I was wrong (not like that hasn't happened before)

One question I have is ...Why the 757? is it because it is a type that AC doesn't operate?

[rob_andrews]

One question I have is ...Why the 757? is it because it is a type that AC doesn't operate?

[ModerateChop]

...

[boestar]

Because thomas Cook has a bunch of em...

[boestar]

As was explained previously... Jazz will not be competing with Aircanada. Jazz is simply managing the aircraft and crew on behalf of the owner. Smae deal as Sky service was doing.

[J.O.]

Get real! Why do you think Air Transat ended their relationship with Westjet? It's because Westjet vacations was competing directly with Transat Holidays.

[rob_andrews]

Get real! Why do you think Air Transat ended their relationship with Westjet? It's because Westjet vacations was competing directly with Transat Holidays.

In your example though both companies actually marketed, priced, scheduled the flights and tour packages. In this case Jazz is NOT marketing, pricing, scheduling or even selling a single flight or tour package. Jazz is only providing the aircraft, crew, maintenance and insurance (ACMI) for the tour operator, Thomas Cook. The company competing isn't Jazz but Thomas Cook who has selected Jazz as its uplift partner. It's exactly like Air Transat selecting CanJet to operate B737's on select routes, CanJet doesn't sell or market or schedule anything they just provide the ACMI.

Cheers!

[RussD]

Get real! Why do you think Air Transat ended their relationship with Westjet? It's because Westjet vacations was competing directly with Transat Holidays.

You may be correct if Jazz formed Jazz Vacations and starting competing directly with AC.

They're not from what I can see. How is this any different than what the vast majority of CPA carriers are doing all over North America? (skywest, mesa, Air wisconsin, ASA, Horizon etc etc) They all provide capacity for other carriers that are in direct competition with each other.

As an aside their was talk at the time of the CPA renewal between Jazz and AC that the exclusivity clauses were relaxed. Don't know if there was any truth to that or not. I do know the original CPA contemplated the possibility of Jazz stepping out of the AC box to some degree.